UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

__________________________________________________________________

FORM 10-Q

__________________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission File Number: 001-35966

__________________________________________________________________

bluebird bio, Inc.

(Exact Name of Registrant as Specified in Its Charter)

__________________________________________________________________

Delaware	13-3680878
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

455 Grand Union Boulevard
Somerville	,	Massachusetts	02145
(Address of Principal Executive Offices)			(Zip Code)

(339) 499-9300

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

__________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	BLUE	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  ☒

As of August 3, 2022, there were 77,121,751 shares of the registrant’s Common Stock, par value $0.01 per share, outstanding.

FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

•the initiation, timing, progress and results of our preclinical and clinical studies, and our research and development programs;

•our ability to advance product candidates into, and successfully complete, clinical studies;

•our ability to obtain adequate financing to fund our operations and to execute on our strategy;

•our ability to implement and realize expected cost savings from our comprehensive restructuring plans;

•our ability to establish and scale commercial viral vector and drug product manufacturing capabilities, and to ensure adequate supply of our viral vectors and drug products;

•the timing or likelihood of regulatory filings and marketing approvals for our product candidates;

•the timing or success of commercialization of any approved products;

•our ability to obtain adequate pricing and reimbursement of any approved products;

•the implementation of our business model, strategic plans for our business, product candidates and technology;

•estimates of our expenses, future revenues, capital requirements and our needs for additional financing;

•developments relating to our competitors and our industry;

•the impact of the COVID-19 pandemic;

•the effects, costs, and benefits of the separation of our portfolio of products and programs into two independent, publicly-traded companies; and

•other risks and uncertainties, including those listed under Part II, Item 1A. Risk Factors.

Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A. Risk Factors and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.

Summary of the Material and Other Risks Associated with Our Business

Below is a summary of the material risks to our business, operations and the investment in our common stock. This summary does not address all of the risks that we face. Risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Quarterly Report on Form 10-Q in its entirety before making investment decisions regarding our common stock.

•The FDA has placed our clinical studies of lovo-cel on partial clinical hold, and we have no assurance as to what the FDA may require, or the timing, if ever, of when the partial clinical hold may be lifted, or when we may resume enrolling pediatric patients in our clinical studies of lovo-cel.

•The FDA has placed our clinical studies of eli-cel on clinical hold, and we have no assurances as to what the FDA may require, or the timing, if ever, of when this clinical hold may be lifted, or the effect this clinical hold may have on FDA's ongoing review of the Biologics License Application ("BLA") for eli-cel.

•We cannot predict when or if we will obtain marketing approval to commercialize our product candidates, and the marketing approval of our product and any future products may ultimately be for more narrow indications than we expect.

•We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.

•There is substantial doubt regarding our ability to continue as a going concern. We will need to raise additional financing in upcoming periods, which may not be available on acceptable terms, or at all. Failure to obtain necessary capital when needed may force us to delay, limit or terminate our commercial readiness efforts, activities to support a potential commercial launch following any approval of our product candidates, or other operations.

•Insertional oncogenesis is a risk of gene therapies using viral vectors that can integrate into the genome, and several patients with CALD treated with eli-cel in our clinical studies have been diagnosed with myelodysplastic syndrome likely mediated by Lenti-D lentiviral vector ("LVV") insertion. These events may require us to halt or delay further clinical development of our product candidates, such as eli-cel, or to suspend or cease commercialization following marketing approval, if any, and the commercial potential of our product candidates may be materially and negatively impacted.

•We have limited experience as a commercial company and the marketing and sale of future products may be unsuccessful or less successful than anticipated.

•The commercial success of our future products will depend upon the degree of market acceptance by physicians, patients, third-party payers and others in the medical community. If we fail to obtain sufficient pricing or reimbursement approval for any future products, our revenues may be adversely affected and our business may suffer.

•If the market opportunities for our product or any future products are smaller than we believe they are, and if we are not able to successfully identify patients and achieve significant market share, our revenues may be adversely affected and our business may suffer.

•We rely on a complex supply chain for our product candidates. The manufacture and delivery of our LVV and drug products present significant challenges for us, and we may not be able to produce our vector and drug products at the quality, quantities, locations or timing needed to support our clinical programs or potential commercialization. In addition, we may encounter challenges with engaging or coordinating with qualified treatment centers needed to support potential commercialization.

•We face intense competition and rapid technological change and the possibility that our competitors may develop therapies that are more advanced or effective than ours, which may adversely affect our financial condition and our ability to successfully commercialize our product and any future products.

•Our future success depends on our ability to retain key employees, consultants and advisors and to attract, retain and motivate qualified personnel.

bluebird bio, Inc.

Table of Contents

		Page
PART I. FINANCIAL INFORMATION		2
Item 1.	Financial Statements (unaudited)	2
	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021	3
	Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2022 and 2021	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	50
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	18
Item 4.	Controls and Procedures	19
PART II. OTHER INFORMATION		20
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Uses of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	59
Item 6.	Exhibits	59
SIGNATURES		61

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

bluebird bio, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except par value amounts)

	As of June 30, 2022		As of December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	81,499	$	161,160
Marketable securities	51,010		138,343
Prepaid expenses	24,473		25,628
Receivables and other current assets	10,476		11,389
Total current assets	167,458		336,520
Marketable securities	40,641		97,114
Property, plant and equipment, net	14,566		9,706
Goodwill	5,646		5,646
Operating lease right-of-use assets	292,731		91,532
Restricted cash and other non-current assets	52,550		53,277
Total assets	$	573,592	$	593,795
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	24,865	$	25,883
Accrued expenses and other current liabilities	75,550		103,958
Operating lease liability, current portion	48,446		23,152
Total current liabilities	148,861		152,993
Operating lease liability, net of current portion	244,522		66,432
Other non-current liabilities	93		93
Total liabilities	393,476		219,518
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value, 5,000 shares authorized; 0 shares issued and outstanding at June 30, 2022 and December 31, 2021	—		—
Common stock, $0.01 par value, 125,000 shares authorized; 73,551 and 71,115 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	735		711
Additional paid-in capital	4,126,012		4,096,402
Accumulated other comprehensive loss	(4,416)		(2,911)
Accumulated deficit	(3,942,215)		(3,719,925)
Total stockholders’ equity	180,116		374,277
Total liabilities and stockholders’ equity	$	573,592	$	593,795

See accompanying notes to unaudited condensed consolidated financial statements.

2

bluebird bio, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except per share data)

	For the three months ended June 30,				For the six months ended June 30,
	2022		2021		2022		2021
Revenue:
Product revenue	$	1,331	$	—	$	2,739	$	724
Other revenue	188		143		725		313
Total revenues	1,519		143		3,464		1,037
Operating expenses:
Research and development	63,841		84,645		141,716		167,488
Selling, general and administrative	36,694		54,984		72,800		118,553
Cost of product revenue	1,745		15,215		10,055		15,791
Restructuring expenses	6,639		—		6,639		—
Total operating expenses	108,919		154,844		231,210		301,832
Loss from operations	(107,400)		(154,701)		(227,746)		(300,795)
Interest income, net	174		218		280		573
Other (expense) income, net	7,088		(1,274)		5,176		23,027
Loss before income taxes	(100,138)		(155,757)		(222,290)		(277,195)
Income tax (expense) benefit	—		(216)		—		(282)
Net loss from continuing operations	(100,138)		(155,973)		(222,290)		(277,477)
Net loss from discontinued operations	—		(85,729)		—		(170,033)
Net loss	$	(100,138)	$	(241,702)	$	(222,290)	$	(447,510)
Net loss per share from continuing operations - basic and diluted	$	(1.36)	$	(2.31)	$	(3.02)	$	(4.13)
Net loss per share from discontinued operations - basic and diluted	$	—	$	(1.27)	$	—	$	(2.53)
Net loss per share - basic and diluted	$	(1.36)	$	(3.58)	$	(3.02)	$	(6.66)
Weighted-average number of common shares used in computing net loss per share - basic and diluted:	73,767		67,487		73,727		67,233
Other comprehensive (loss) income:
Other comprehensive (loss) income, net of tax benefit (expense) of $0.0 million for the three and six months ended June 30, 2022 and 2021	43		(328)		(1,505)		(272)
Total other comprehensive (loss) income	43		(328)		(1,505)		(272)
Comprehensive loss	$	(100,095)	$	(242,030)	$	(223,795)	$	(447,782)

See accompanying notes to unaudited condensed consolidated financial statements.

3

bluebird bio, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(in thousands)

	Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders' equity
	Shares	Amount
Balances at December 31, 2021	71,115	$	711	$	4,096,402	$	(2,911)	$	(3,719,925)	$	374,277
Vesting of restricted stock units	310	3		(3)		—		—		—
Exercise of stock options	1	—		1		—		—		1
Stock-based compensation	—	—		12,681		—		—		12,681
Issuance of unrestricted stock awards to settle     accrued employee compensation	12	—		—		—		—		—
Other comprehensive income	—	—		—		(1,548)		—		(1,548)
Net loss	—	—		—		—		(122,152)		(122,152)
Balances at March 31, 2022	71,438	$	714	$	4,109,081	$	(4,459)	$	(3,842,077)	$	263,259
Vesting of restricted stock units	60	$	1	$	(1)					$	—
Exercise of stock options	1	$	—	$	1					$	1
Issuance of common stock	2,052	$	20	$	8,023					$	8,043
Stock-based compensation	—	$	—	$	8,908					$	8,908
Other comprehensive income						$	43			$	43
Net loss								$	(100,138)	$	(100,138)
Balances at June 30, 2022	73,551	$	735	$	4,126,012	$	(4,416)	$	(3,942,215)	$	180,116

	Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders' equity
	Shares	Amount
Balances at December 31, 2020	66,432	$	665	$	4,260,443	$	(5,505)	$	(2,900,547)	$	1,355,056
Vesting of restricted stock units	294	3		(3)		—		—		—
Exercise of stock options	207	2		1,217		—		—		1,219
Purchase of common stock under ESPP	67	1		1,706		—		—		1,707
Stock-based compensation	—	—		36,090		—		—		36,090
Issuance of unrestricted stock awards to settle     accrued employee compensation	422	4		12,009		—		—		12,013
Other comprehensive income	—	—		—		56		—		56
Net loss	—	—		—		—		(205,808)		(205,808)
Balances at March 31, 2021	67,422	$	675	$	4,311,462	$	(5,449)	$	(3,106,355)	$	1,200,333
Vesting of restricted stock units	127	$	1	$	(1)	$	—	$	—	$	—
Exercise of stock options	2	$	—	$	36	$	—	$	—	$	36
Stock-based compensation	—	$	—	$	26,222	$	—	$	—	$	26,222
Other comprehensive loss	—	$	—	$	—	$	(328)	$	—	$	(328)
Net loss	—	$	—	$	—	$	—	$	(241,702)	$	(241,702)
Balances at June 30, 2021	67,551	$	676	$	4,337,719	$	(5,777)	$	(3,348,057)	$	984,561

4

bluebird bio, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	For the six months ended June 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(222,290)	$	(447,510)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of contingent consideration	—		416
Depreciation and amortization	2,358		11,353
Stock-based compensation expense	21,298		73,687
Loss (gain) on equity securities	3,135		(28,286)
Excess inventory reserve	7,519		15,084
Other non-cash items	661		6,228
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(9,629)		(3,481)
Operating lease right-of-use assets	17,636		15,074
Accounts payable	(1,175)		7,475
Accrued expenses and other liabilities	(28,565)		17,453
Operating lease liabilities	(10,602)		(16,468)
Net cash used in operating activities	(219,654)		(348,975)
Cash flows from investing activities:
Purchase of property, plant and equipment	(6,836)		(9,204)
Purchases of marketable securities	—		(196,145)
Proceeds from maturities of marketable securities	108,225		557,751
Proceeds from sales of marketable securities	30,213		31,318
Purchase of intangible assets	—		(2,000)
Net cash provided by investing activities	131,602		381,720
Cash flows from financing activities:
Proceeds from exercise of stock options and ESPP contributions	—		4,192
Proceeds from the secondary public offering, net of issuance costs	$	8,043	—
Net cash provided by financing activities	8,043		4,192
(Decrease) increase in cash, cash equivalents and restricted cash	(80,009)		36,937
Cash, cash equivalents and restricted cash at beginning of period	206,693		373,728
Cash, cash equivalents and restricted cash at end of period	$	126,684	$	410,665
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	81,499	$	353,468
Restricted cash included in receivables and other current assets	$	1,635	$	2,687
Restricted cash included in restricted cash and other non-current assets	$	43,550	$	54,510
Total cash, cash equivalents and restricted cash	$	126,684	$	410,665
Supplemental cash flow disclosures from investing and financing activities:
Purchases of property, plant and equipment included in accounts payable and accrued expenses	$	842	$	1,508
Right-of-use assets obtained in exchange for operating lease liabilities	$	218,836	$	22,049
Issuance of unrestricted stock awards to settle accrued employee compensation	$	—	$	12,013
Purchases of intangible assets included in accounts payable and accrued expenses, net of reimbursement receivable from collaboration partner	$	—	$	6,500

See accompanying notes to unaudited condensed consolidated financial statements.

5

bluebird bio, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Description of the business

bluebird bio, Inc. (the “Company” or “bluebird”) was incorporated in Delaware on April 16, 1992, and is headquartered in Cambridge, Massachusetts. The Company is a biotechnology company committed to researching, developing and commercializing potentially transformative gene therapies for severe genetic diseases. Since its inception, the Company has devoted substantially all of its resources to its research and development efforts relating to its product candidates, including activities to manufacture product candidates, conduct clinical studies of its product candidates, perform preclinical research to identify new product candidates and provide selling, general and administrative support for these operations, including commercial-readiness activities.

The Company’s programs in severe genetic diseases include betibeglogene autotemcel ("beti-cel", formerly "LentiGlobin for β-thalassemia gene therapy") being developed as a treatment for β-thalassemia; lovotibeglogene autotemcel ("lovo-cel", formerly "LentiGlobin for SCD") being developed as a treatment for sickle cell disease ("SCD"); and elivaldogene autotemcel ("eli-cel", formerly "Lenti-D gene therapy") being developed as a treatment for cerebral adrenoleukodystrophy ("CALD").

In August 2021, the Company announced its intent to focus its severe genetic disease business on the U.S. market and further invest in research and development for its core programs in β-thalassemia, SCD, and CALD. As part of the strategy to focus on the U.S. market, it began executing an orderly wind down of its European operations, which will result in a reduction of selling, general and administrative costs and had an impact on the Company's excess inventory analysis, which is based on sales forecasts and projected inventory consumption levels.

In November 2021, the Company completed the separation of its severe genetic disease and oncology programs into two separate, independent publicly traded companies, bluebird bio, Inc. and 2seventy bio, Inc. (“2seventy bio”), a Delaware corporation and wholly-owned subsidiary of the Company prior to the separation. bluebird retained its severe genetic disease programs, including programs for β-thalassemia, SCD, and CALD, with a focus on the U.S. market.

In April 2022, the Board of Directors approved a comprehensive restructuring plan intended to reduce operating expenses and enhance the Company’s focus on achieving U.S. Food and Drug Administration ("FDA") approval for its programs in the U.S. The Company intends to maintain targeted research efforts focused on in-vivo lentiviral vector ("LVV") gene therapy and to deprioritize direct investments in reduced toxicity conditioning and cryopreserved apheresis. As part of the restructuring, bluebird plans to reduce its workforce by approximately 30% across the second and third quarters of 2022. Refer to Note 14, Reduction in workforce, for more information on this restructuring.

On June 22, 2022, the Company entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with Goldman Sachs & Co. LLC (“Goldman”) to sell shares of the Company’s common stock up to $75.0 million, from time to time, through an “at the market” equity offering program under which Goldman will act as manager. The Equity Distribution Agreement also provides for the sale of shares to Goldman directly as principal, in which case the Company and Goldman will enter into a separate terms agreement. The Company will pay Goldman a commission equal to up to 3.0% of the gross proceeds of any Common Stock sold through Goldman under the Equity Distribution Agreement. In the three months ended June 30, 2022, the Company sold 2.1 million shares of common stock at-the-market under the Equity Distribution Agreement, resulting in gross proceeds of approximately $8.3 million ($8.0 million net of offering costs). Refer to Note 10, Equity, for more information.

As of June 30, 2022, the Company had cash, cash equivalents and marketable securities of approximately $173.2 million. The Company has incurred losses since inception and to date has financed its operations primarily through the sale of equity securities and, to a lesser extent, through collaboration agreements and grants from charitable foundations. As of June 30, 2022, the Company had an accumulated deficit of $3.94 billion. During the six months ended June 30, 2022, the Company incurred a loss of $222.3 million and used $219.7 million of cash in operations. The Company expects to continue to generate operating losses and negative operating cash flows for the next few years and will need additional funding to support its planned operating activities through profitability. The transition to profitability is dependent upon the successful development, approval, and commercialization of beti-cel, eli-cel, and lovo-cel, and the achievement of a level of revenues adequate to support its cost structure.

6

In accordance with Accounting Standards Codification 205-40, Going Concern ("ASC 205-40"), the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. In performing its analysis, management excluded certain elements of its operating plan that cannot be considered probable. Under ASC 205-40, the future receipt of potential funding from future equity or debt issuances, the release of restricted cash related to the Company’s 50 Binney Street lease, and the potential sale of priority review vouchers cannot be considered probable at this time because these plans are not entirely within the Company’s control nor have been approved by the Board of Directors as of the date of these condensed consolidated financial statements. The restructuring plan described above was approved by the Board of Directors in April 2022 and therefore was incorporated into the Company's assessment of its ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued.

The Company's expectation to generate operating losses and negative operating cash flows in the future and the need for additional funding to support its planned operations raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date that these condensed consolidated financial statements are issued. Management's plans to alleviate the conditions that raise substantial doubt include implementing reduced 2022 spending, including projected savings through the move of the Company's headquarters to Assembly Row in Somerville, Massachusetts, the completion of its orderly wind down of European operations, the completion of its April 2022 restructuring plans, the potential sale of priority review vouchers that would be issued with the potential U.S. regulatory approvals of BLAs for beti-cel and/or eli-cel, and the pursuit of additional cash resources through public or private equity or debt financings. Management has concluded the likelihood that its plan to successfully obtain sufficient funding from one or more of these sources, or adequately reduce expenditures, while reasonably possible, is less than probable. In accordance with ASC 205-40, the Company has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for a period of at least 12 months from the date of issuance of these condensed consolidated financial statements.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

2. Basis of presentation, principles of consolidation and significant accounting policies

Basis of presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States GAAP as included in the ASC and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods ended June 30, 2022 and 2021.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2021, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2022 (the "2021 Annual Report on Form 10-K").

Certain items in the prior year’s condensed consolidated financial statements have been reclassified to conform to the current presentation. The Company has presented its oncology business together with its manufacturing facility in Durham,

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North Carolina as discontinued operations in its consolidated financial statements for the three and six months ended June 30, 2021 (see Note 3, Discontinued operations). The historical financial statements and footnotes have been recast accordingly.

Amounts reported are computed based on thousands, except percentages, per share amounts or as otherwise noted. As a result, certain totals may not sum due to rounding.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. 2seventy bio was a wholly-owned subsidiary until it became an independent publicly-traded company on November 4, 2021. All intercompany balances and transactions have been eliminated in consolidation. The Company views its operations and manages its business in one operating segment.

Discontinued operations

The Company determined that the separation of its oncology business in November 2021 and the sale of its manufacturing facility in Durham, North Carolina in September 2021 represented multiple components of a single disposal plan that met the criteria for classification as a discontinued operation in accordance with ASC Subtopic 205-20, Discontinued Operations (“ASC 205-20”). Accordingly, the accompanying condensed consolidated financial statements for the three and six months ended June 30, 2021 have been updated to present the results of all discontinued operations reported as a separate component of loss in the consolidated statements of operations and comprehensive loss (see Note 3, Discontinued operations).

Significant accounting policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and six months ended June 30, 2022 are consistent with those discussed in Note 2 to the consolidated financial statements included in the Company’s 2021 Annual Report on Form 10-K, except as noted in the "Recent accounting pronouncements - Not yet adopted" section below.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including: expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements.

Estimates and judgments are used in the following areas, among others: future undiscounted cash flows and subsequent fair value estimates used to assess potential and measure any impairment of long-lived assets, including goodwill and intangible assets, and the measurement of right-of-use assets and lease liabilities, stock-based compensation expense, accrued expenses, income taxes, the assets and liabilities and losses related to discontinued operations and the assessment of the Company's ability to fund its operations for at least the next twelve months from the date of issuance of these financial statements.

Recent accounting pronouncements

Not yet adopted

ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures

In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), which eliminates the recognition and measurement guidance on troubled debt restructurings for creditors that have adopted ASC 326 and requires enhanced disclosure of loan modifications for borrowers experiencing financial difficulty. ASU 2022-02 amends the guidance on vintage disclosures to require disclosure of current-period gross write-offs by year of origination. The new standard will be effective beginning January 1, 2023. The adoption of ASU 2022-02 is not expected to have a material impact on the Company's financial position or results of operations.

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3. Discontinued operations

Sale of bluebird Research Triangle manufacturing facility

In November 2017, the Company acquired a manufacturing facility in Durham, North Carolina ("bRT") for the future manufacture of LVV for the Company’s therapies related to its oncology programs. In July 2021, the Company and Resilience US, Inc., an affiliate of National Resilience, Inc. ("Resilience"), signed an Asset Purchase Agreement (the “Agreement”). As part of the Agreement, and upon the closing of the transaction in September 2021, Resilience acquired the Company's LVV manufacturing facility located in Durham, North Carolina and retained staff currently employed at the site. As a result of the transaction, the Company disposed of $111.2 million of net assets, primarily consisting of the building and laboratory equipment associated with the Company's oncology programs. The Company recognized a loss on disposal of assets of $2.0 million during the year ended December 31, 2021. As the sale of the bRT manufacturing facility and the separation of 2seventy bio (as described below) were deemed to represent multiple components of a single disposal plan, the results of operations related to bRT have been included as a component of discontinued operations.

2seventy bio Separation

On November 4, 2021, the Company completed the previously announced separation of its oncology programs and portfolio, and the certain related assets and liabilities, into a separate, independent publicly traded company (the “Separation”). The Separation was effected by means of a distribution of all of the outstanding shares of common stock of 2seventy bio in which each bluebird stockholder received one share of common stock, par value $0.0001 per share, of 2seventy bio for every three shares of common stock, par value $0.01 per share, of bluebird held as of the close of business on October 19, 2021 (the “Distribution”).

In connection with the Separation, bluebird entered into a separation agreement (the “Separation Agreement”) with 2seventy bio, dated as of November 3, 2021, that, among other things, set forth bluebird’s agreements with 2seventy bio regarding the principal actions to be taken in connection with the Separation, including the Distribution. The effective time of the Distribution was 12:01 a.m. on November 4, 2021. The Separation Agreement identified assets transferred to, liabilities assumed by and contracts assigned to 2seventy bio as part of the Separation, and it provided for when and how these transfers, assumptions and assignments occurred. The purpose of the Separation Agreement was to provide 2seventy bio and bluebird with assets to operate their respective businesses and retain or assume liabilities related to those assets. Each of 2seventy bio and bluebird agreed to releases, with respect to pre-Separation claims, and cross indemnities, with respect to post-Separation claims, that were principally designed to place financial responsibility for the obligations and liabilities allocated to 2seventy bio under the Separation Agreement with 2seventy bio and financial responsibility for the obligations and liabilities allocated to bluebird under the Separation Agreement with bluebird. bluebird and 2seventy bio are also each subject to mutual 12-month employee non-solicit and non-hire restrictions, subject to certain customary exceptions.

bluebird and 2seventy bio also entered into a tax matters agreement, an employee matters agreement and an intellectual property agreement. Additionally, bluebird entered into two transition services agreements with 2seventy bio, whose President is a member of the Company’s Board of Directors. Pursuant to the transition service agreements, bluebird is obligated to provide and is entitled to receive certain transition services related to corporate functions, such as finance, human resources, internal audit, research and development, financial reporting, and information technology. Services provided by bluebird to 2seventy bio will continue for an initial term of up to two years, unless earlier terminated or extended according to the terms of the transition services agreement. Services received and performed are paid at a mutually agreed upon rate. Amounts received for services provided to 2seventy bio are recorded as other income and amounts paid for services provided by 2seventy bio are recorded as selling, general and administrative expense and research and development expense, as applicable. In addition, the Company entered into a sublease agreement with 2seventy bio for office, laboratory and storage space located at 60 Binney Street (the "60 Binney Street Sublease") while it constructs and outfits its new office and laboratory space.

During the three and six months ended June 30, 2022, the Company incurred $2.5 million and $5.5 million, respectively of net expense for transactions with 2seventy bio within research and development and selling, general and administrative expense in the condensed consolidated statements of operations and comprehensive loss, including $1.1 million and $2.3 million, respectively of net expense related to the 60 Binney Street Sublease. As of June 30, 2022, the Company had $0.4 million of accounts receivable due from and $2.9 million of accounts payable due to 2seventy bio. As of December 31, 2021, the Company had an immaterial amount of accounts receivable and accounts payable due from and due to 2seventy bio.

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Discontinued operations

In connection with the Separation, the Company determined its oncology business, together with the bRT manufacturing facility, qualified for discontinued operations accounting treatment in accordance with ASC 205-20. The following table summarizes revenue and expenses of the discontinued operations for the three and six months ended June 30, 2021 (in thousands):

	Three months ended June 30, 2021		Six months ended June 30, 2021
Revenue:
Service revenue	$	5,314	$	11,232
Collaborative arrangement revenue	1,670		3,190
Royalty and other revenue	345		4,808
Total revenues	7,329		19,230
Operating expenses:
Research and development	59,670		131,305
Selling, general and administrative	23,592		46,898
Share of collaboration loss	10,071		10,071
Cost of royalty and other revenue	86		1,791
Change in fair value of contingent consideration	47		416
Total operating expenses	93,466		190,481
Loss from operations	(86,137)		(171,251)
Interest income, net	220		576
Other income, net	188		642
Loss before income taxes	(85,729)		(170,033)
Income tax benefit (expense)	—		—
Net loss	$	(85,729)	$	(170,033)

There were no revenue and expenses of the discontinued operations for the three and six months ended June 30, 2022, as all operations were transferred to 2seventy bio upon the Separation. There were no assets and liabilities related to discontinued operations as of June 30, 2022 or December 31, 2021, as all balances were transferred to 2seventy bio upon the Separation.

The following table summarizes the significant non-cash items and capital expenditures of the discontinued operations that are included in the condensed consolidated statements of cash flows for the six months ended June 30, 2021 (in thousands):

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	Six months ended June 30, 2021
Operating activities:
Change in fair value of contingent consideration	$	416
Depreciation and amortization	8,300
Stock-based compensation expense	19,104
Loss on fixed asset disposal	254
Investing activities:
Purchase of property, plant and equipment	$	(7,675)
Purchase of intangible assets	(2,000)
Supplemental cash flow disclosures:
Purchases of property, plant and equipment included in accounts payable and accrued expenses	$	1,345
Purchases of intangible assets included in accounts payable and accrued expenses, net of reimbursement receivable from collaboration partner	6,500

4. Marketable securities

The following table summarizes the marketable securities held at June 30, 2022 and December 31, 2021 (in thousands):        

Description	Amortized cost / Cost		Unrealized gains		Unrealized losses		Fair value
June 30, 2022
U.S. government agency securities and treasuries	$	77,943	$	—	$	(1,980)	$	75,963
Corporate bonds	13,294				(105)		13,189
Commercial paper	2,499		—		—		2,499
Equity securities	—		—		—		—
Total	$	93,736	$	—	$	(2,085)	$	91,651
December 31, 2021
U.S. government agency securities and treasuries	$	128,902	$	—	$	(509)	$	128,393
Corporate bonds	49,366		—		(59)		49,307
Commercial paper	54,065		—		—		54,065
Equity securities	4,305		—		(614)		3,691
Total	$	236,638	$	—	$	(1,182)	$	235,456

No available-for-sale debt securities held as of June 30, 2022 or December 31, 2021 had remaining maturities greater than five years.

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5. Fair value measurements

The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 (in thousands):

Description	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
June 30, 2022
Assets:
Cash and cash equivalents	$	81,499	$	81,499	$	—	$	—
Marketable securities:
U.S. government agency securities and treasuries	75,963		—		75,963		—
Corporate bonds	13,189		—		13,189		—
Commercial paper	2,499		—		2,499		—
Equity securities	—		—		—		—
Total	$	173,150	$	81,499	$	91,651	$	—
December 31, 2021
Assets:
Cash and cash equivalents	$	161,160	$	161,146	$	14	$	—
Marketable securities:
U.S. government agency securities and treasuries	128,393		—		128,393		—
Corporate bonds	49,308		—		49,308		—
Commercial paper	54,065		—		54,065		—
Equity securities	3,691		3,691		—		—
Total	$	396,617	$	164,837	$	231,780	$	—

Cash and cash equivalents

The Company considers all highly liquid securities with original final maturities of 90 days or less from the date of purchase to be cash equivalents. As of June 30, 2022 and December 31, 2021, cash and cash equivalents comprise funds in cash and money market accounts.

Marketable securities

Marketable securities classified as Level 2 within the valuation hierarchy generally consist of U.S. government agency securities and treasuries, corporate bonds, and commercial paper. The Company estimates the fair values of these marketable securities by taking into consideration valuations obtained from third-party pricing sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs. The Company validates the prices provided by its third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to the earliest call date for premiums or to maturity for discounts. At June 30, 2022 and December 31, 2021, the balance in the Company’s accumulated other comprehensive loss was composed primarily of activity related to the Company’s available-for-sale debt securities. There were no material realized gains or losses recognized on the sale or maturity of available-for-sale debt securities during the three and six months ended June 30, 2022 or 2021.

Accrued interest receivable on the Company's available-for-sale debt securities totaled $0.1 million and $0.3 million as of June 30, 2022 and December 31, 2021, respectively. No accrued interest receivable was written off during the three and six months ended June 30, 2022 or 2021.

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The following table summarizes available-for-sale debt securities in a continuous unrealized loss position for less than and greater than twelve months, and for which an allowance for credit losses has not been recorded at June 30, 2022 and December 31, 2021 (in thousands):

	Less than 12 months				12 months or greater				Total
Description	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
June 30, 2022
U.S. government agency securities    and treasuries	$	68,129	$	(1,814)	$	7,834	$	(166)	$	75,963	$	(1,980)
Corporate bonds	6,672		(79)		6,517		(26)		13,189		(105)
Total	$	74,801	$	(1,893)	$	14,351	$	(192)	$	89,152	$	(2,085)
December 31, 2021
U.S. government agency securities    and treasuries	$	108,695	$	(505)	$	2,496	$	(4)	$	111,191	$	(509)
Corporate bonds	45,042		(56)		3,896		(2)		48,938		(58)
Total	$	153,737	$	(561)	$	6,392	$	(6)	$	160,129	$	(567)

The Company determined that there was no material change in the credit risk of the above investments during the six months ended June 30, 2022. As such, an allowance for credit losses was not recognized. In April 2022, the Company sold securities with a carrying value of $29.7 million and realized net aggregate losses of $0.4 million. As of June 30, 2022, the Company does not intend to sell such securities before recovery of their amortized cost bases.

The Company held equity securities with an aggregate fair value of $0.0 million and $3.7 million as of June 30, 2022 and December 31, 2021, respectively, within current marketable securities on its condensed consolidated balance sheets. In January 2021, the Company sold a portion of its equity securities for proceeds of $31.3 million. In May 2022, the Company sold the remainder of the equity securities for proceeds of $0.6 million. During the three months ended June 30, 2022 and 2021, the Company recorded a loss of $0.6 million and $0.1 million, respectively, related to its equity securities. During the six months ended June 30, 2022 and 2021, the Company recorded a loss of $3.1 million and a gain of $28.3 million, respectively. Gains and losses related to equity securities are included in other (expense) income, net in the condensed consolidated statements of operations and comprehensive loss.

6. Property, plant and equipment, net

Property, plant and equipment, net, consists of the following (in thousands):

	As of June 30, 2022		As of December 31, 2021
Laboratory equipment	$	28,838	$	29,061
Computer equipment and software	1,733		421
Office equipment	5,679		117
Leasehold improvements	—		12
Construction-in-progress	817		501
Total property, plant and equipment	37,067		30,112
Less accumulated depreciation and amortization	(22,501)		(20,406)
Property, plant and equipment, net	$	14,566	$	9,706

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7. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

	As of June 30, 2022		As of December 31, 2021
Accrued manufacturing costs	$	18,530	$	15,722
Accrued goods and services	14,567		24,273
Accrued clinical and contract research organization costs	18,069		17,769
Accrued employee compensation	19,853		41,095
Accrued professional fees	1,226		1,665
Deferred revenue, current portion	1,635		2,282
Other	1,670		1,152
Total accrued expenses and other current liabilities	$	75,550	$	103,958

Accrued employee compensation as of December 31, 2021 includes severance costs associated with the Company's orderly wind down of its European operations. In April 2022, the Company announced a restructuring which included a reduction in force. As of June 30, 2022, the Company had $2.7 million of accrued employee compensation related to the April 2022 restructuring. Please refer to Note 14, Reduction in workforce, for further information.

8. Leases

The Company leases certain office and laboratory space, primarily located in Cambridge, Massachusetts and Somerville, Massachusetts. Additionally, the Company has embedded leases through its agreements with contract manufacturing organizations in both the United States and internationally. Except as described below, there have been no material changes in lease obligations from those disclosed in Note 10 to the consolidated financial statements included in the Company's 2021 Annual Report on Form 10-K.

Assembly Row lease

In November 2021, the Company entered into a lease agreement with Assembly Row 5B, LLC ("Landlord") for office space located at 455 Grand Union Boulevard in Somerville, Massachusetts to serve as the Company's future corporate headquarters (the “Assembly Row Lease”). Upon signing the Assembly Row Lease, the Company executed a $2.8 million letter of credit for the Landlord’s benefit, which is classified as restricted cash and other non-current assets on the Company’s condensed consolidated balance sheets. In March 2022, the Assembly Row Lease commenced upon the Landlord granting the Company control of the leased premises. The Assembly Row Lease will continue until December 31, 2032, with an option to extend for two additional five-year terms. The Company classified the Assembly Row Lease as an operating lease and recognized a right-of-use asset and lease liability upon lease commencement. The Company will recognize rent expense on a straight-line basis throughout the remaining term of the Assembly Row Lease.

50 Binney Street lease & sublease

In April 2019, the Company entered into an agreement to lease office space located at 50 Binney Street in Cambridge, Massachusetts (the “50 Binney Street Lease”). In December 2021, the Company entered into an agreement to sublease the entire office space to Meta Platforms, Inc. (“Meta”) (the "Sublease"). In April 2022, both the 50 Binney Street Lease and the Sublease commenced upon the landlord granting access to the leased premises. In connection with the execution of the 50 Binney Street Lease, the Company also entered into a purchase agreement with the landlord for furniture and equipment (the “Furniture Purchase Agreement”) located on the premises upon lease commencement. Upon execution of the Furniture Purchase Agreement, the Company made an upfront payment of $7.5 million. Upon lease commencement, the Company paid the remaining $7.25 million due under the Furniture Purchase Agreement. The fair value of the furniture is $2.4 million, and the remaining excess of the $7.25 million payment over fair value will be recognized as expense over the life of the lease. The Company classified the 50 Binney Street Lease as an operating lease and recognized the right-of-use asset and lease liability upon lease commencement. The Company will recognize rent expense on a straight-line basis throughout the remaining term of the 50 Binney Street Lease.

The Sublease will continue until December 31, 2030. The Company classified the 50 Binney Street Sub-lease as an operating lease. The Company will earn rental income through its role as a lessor throughout the term of the Sublease. The

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amount of sublease income recognized through June 30, 2022 for the 50 Binney sublease is $7.5 million included as other income on the statement of operations.

9. Commitments and contingencies

Other funding commitments

The Company is party to various agreements, principally relating to licensed technology, that require future payments relating to milestones that may be met in subsequent periods or royalties on future sales of specified products.

Company may be obligated to make future development, regulatory, and commercial milestone payments, and royalty payments on future sales of specified products associated with its collaboration and license agreements. Payments under these agreements generally become due and payable upon achievement of such milestones or sales. When the achievement of these milestones or sales have occurred, the corresponding amounts are recognized in the Company’s financial statements.

Additionally, the Company is party to various contracts with contract research organizations and contract manufacturers that generally provide for termination on notice, with the exact amounts in the event of termination to be based on the timing of the termination and the terms of the agreement. As compared to the contractual obligations and commitments as disclosed in the Company's 2021 Annual Report on Form 10-K, the Company's future minimum purchase commitments as of the six months ended June 30, 2022 decreased by $23.0 million.

While there are no material legal proceedings the Company is aware of, the Company may become party to various claims and complaints arising in the ordinary course of business, including securities class action litigation. The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to the agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is generally unlimited. Management does not believe that any ultimate liability resulting from any of these claims will have a material adverse effect on its results of operations, financial position, or liquidity. However, management cannot give any assurance regarding the ultimate outcome of any claims, and their resolution could be material to operating results for any particular period.

The Company also indemnifies each of its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company's request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and by-laws. The term of the indemnification period lasts as long as such officer or director may be subject to any proceeding arising out of acts or omissions of such officer or director in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company currently holds director and officer liability insurance. This insurance allows the transfer of risk associated with the Company's exposure and may enable it to recover a portion of any future amounts paid. The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, it has not recognized any liabilities relating to these obligations.

10. Equity

On June 22, 2022, the Company entered into the Equity Distribution Agreement with Goldman to sell shares of the Company’s common stock, with aggregate gross sales proceeds of up to $75.0 million, from time to time, through an “at the market” equity offering program under which Goldman will act as manager. The Equity Distribution Agreement also provides for the sale of shares to Goldman directly as principal, in which case the Company and Goldman will enter into a separate term agreement.

Under the Equity Distribution Agreement, the Company will set the parameters for the sale of shares, including any price, time or size limits or other customary parameters or conditions. The Company intends to sell shares pursuant to the Equity Distribution Agreement from time to time in varying amounts, which may be limited, based upon factors including (among others) market conditions, trading liquidity, the trading price of the Company’s common stock, and determinations by the Company of its need for, and appropriate sources of, additional capital. Subject to the terms and conditions of the Equity Distribution Agreement, Goldman may sell the shares by any method permitted by law, including without limitation (i) by means of ordinary brokers’ transactions (whether or not solicited), (ii) to or through a market maker, (iii) directly on or through any national securities exchange or facility thereof, a trading facility of a national securities association, an alternative trading system, or any other market venue, (iv) in the over-the-counter market, (v) in privately negotiated transactions, or (vi) through a combination of any such methods. The Company will pay Goldman a commission equal to up to 3.0% of the gross proceeds of

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any common stock sold through Goldman under the Equity Distribution Agreement, and also has provided Goldman with customary representations, warranties, covenants and indemnification rights. The Equity Distribution Agreement may be terminated by the Company upon written notice to Goldman or by Goldman upon written notice to the Company. In the case of any purchase of shares by Goldman directly as principal pursuant to a Terms Agreement, such Terms Agreement may be terminated by Goldman upon notice to the Company under certain circumstances, including but not limited to the occurrence of a material adverse effect in the Company.

In the three months ended June 30, 2022, the Company has sold 2.1 million shares of common stock for gross proceeds of $8.3 million ($8.0 million net of offering costs).

11. Stock-based compensation

In January 2022 and 2021, the number of shares of common stock available for issuance under the 2013 Stock Option and Incentive Plan (“2013 Plan”) was increased by approximately 2.8 million and 2.7 million shares, respectively, as a result of the automatic increase provision of the 2013 Plan. As of June 30, 2022, the total number of shares of common stock available for issuance under the 2013 Plan was approximately 4.7 million.

Stock-based compensation expense

The Company recognized stock-based compensation expense totaling $8.9 million and $23.1 million during the three months ended June 30, 2022 and 2021, respectively. The Company recognized stock based compensation expense totaling $21.3 million and $54.4 million on for the six months ended June 30, 2022 and 2021, respectively. Stock-based compensation expense recognized by award type is included within the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):

	For the three months ended June 30,				For six months ended June 30,
	2022		2021(1)		2022		2021(1)
Stock options	$	3,685	$	13,863	$	8,945	$	30,289
Restricted stock units	4,850		5,956		11,884		16,173
Employee stock purchase plan and other	372		3,307		469		7,958
	$	8,907	$	23,126	$	21,298	$	54,420

(1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

Stock-based compensation expense by classification included within the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands): 

	For the three months ended June 30,				For six months ended June 30,
	2022		2021(1)		2022		2021(1)
Research and development	$	5,255	$	10,336	$	11,810	$	22,726
Selling, general and administrative	3,652		12,790		9,488		31,694
	$	8,907	$	23,126	$	21,298	$	54,420

(1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

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Stock options

The following table summarizes the stock option activity under the Company’s equity award plans and have been adjusted to reflect the effects of the Separation:

	Shares (in thousands)	Weighted- average exercise price per share
Outstanding at December 31, 2021	3,586	$	39.23
Granted	967	$	7.48
Exercised	(2)	$	1.04
Canceled or forfeited	(1,482)	$	41.11
Outstanding at June 30, 2022	3,069	$	29.48